Cratering energy and commodity prices push Kuwait to nix a $17 billion deal with Dow Chemical which would have given the chemical giant access to cheap gas and cash to finance its takeover of Rohm and Haas, in the FT and the WSJ (sub reqd.).

As it searches for the right energy blueprint, the U.S. can do better than to create an alternative-energy bubble, argues nuclear-power advocate William Tucker in the WSJ (sub reqd.): “A prudent position for Republicans should be: ‘Carbon limits, yes, subsidies, no.’ If a carbon tax or cap-and-trade auction is imposed, use the revenues to reduce other taxes so it won’t cripple the economy. The thing to avoid is a wild, congressionally driven speculative boom in alternative energy.” New MIT research shows that a price on carbon won’t do much to spur renewables, but will push clean coal, at MIT Technology Review.

California’s newfound power over national environmental policy harkens back to Texas politicians’ dominance of Washington in the 1950s, notes the WaPo. What will that mean? The WSJ edit page worries about over-zealous environmental regulation: “Green groups have a history of rejecting cost-benefit analysis as a matter of ideology more than utility. They don’t trust business, and they believe that their own specific environmental goals are a higher public good than whatever is lost to society from exorbitant costs. But there is a price for everything in life, and reasonable regulation ought to include a judgment about relative costs and benefits.”

Despite all the economic doom and gloom, 2008 was not a bad year for clean tech. Earth2Tech rounds up the year’s highlights from a clean-tech perspective, including the election victory of Barack Obama, new clean-energy legislation, and record levels of investment.

About Environmental Capital

Environmental Capital provides daily news and analysis of the shifting energy and environmental landscape. The Wall Street Journal’s Keith Johnson is the lead writer. Environmental Capital is led by Journal energy reporter Russell Gold, and includes contributions from other writers at the Journal, WSJ.com, and Dow Jones Newswires. Write us at environmentalcapital@wsj.com.